After years of waiting, the Fed's moment is finally here

Federal Reserve Chairman Janet Yellen speaks at an event hosted by the Economic Club of Washington Thomson Reuters LONDON (Reuters) - After years of waiting, it's finally here. No, not the new "Star Wars" movie: Fed week.

Barring a shock, the Federal Reserve will raise U.S. interest rates on Wednesday for the first time since June 2006, a full year before the global financial crisis began.

Data releases will meanwhile give clues to the robustness of other economies, some of which are seen as vulnerable to investment outflows as higher interest rates make U.S. assets more attractive. Especially in emerging markets, where currencies and other assets have plunged in value this year, that process has already started.

The weekend should see Chinese industrial output and retail sales numbers while markets will watch the second round of French regional elections in which tactical voting may defeat far-right first round victor Marine le Pen's National Front.

The Bank of Japan's tankan survey on Monday is expected to show business sentiment among big manufacturers receding for the second consecutive quarter, reflecting China's slowdown and lackluster domestic demand.

After unexpectedly strong readings in November, the monthly Ifo and ZEW surveys are expected to show German business and economic morale remain relatively robust although they may fall short of last month.

The Ifo jumped to 109 in November, its highest since June 2014, shrugging off an economic slowdown in China, the Volkswagen emissions scandal and the Islamist attacks in Paris, while the ZEW rose for the first time in seven months.

"Weaker growth in the emerging markets and easing tailwinds from the FX market will weigh on business sentiment. Thus, the Ifo business climate and the Purchasing Managers' Indices for the euro zone probably fell in December," said Commerzbank analysts in a note.

Flash PMIs for France, Germany and the euro zone are due on Wednesday, hours before the Fed announces its decision.

Thursday's survey of French business sentiment will be the first taken in the euro zone's second-largest economy since the attacks that killed 130 people in its capital on Nov. 13.

Wednesday also brings the final reading of November euro zone inflation, after an initial release on Dec. 3 showed annual price growth at a lower than expected 0.1 percent and core inflation -- excluding volatile energy -- unexpectedly slowing.

That helped prompt further stimulus measures from the European Central Bank last week, one of 43 central banks which in contrast to the Fed have loosened monetary policy this year to help spur inflation and growth.

The coming week sees rate decisions from the central banks of Japan, Uganda, Sweden, Norway, Hungary, Mexico, Indonesia, the Philippines, Egypt and Chile, some of which are already battling to support currencies hit by expectations of a U.S. hike.

Franklin Templeton's star bond investor Michael Hasenstab said recently that higher U.S. rates would magnify differences between emerging market economies in 2016, although he said concerns about a "systemic crisis" were exaggerated.

Hasenstab said stronger economic fundamentals should make countries like South Korea, Mexico and Malaysia resilient but that weaker Turkey and South Africa, both of which have hefty current account deficits, could be more negatively affected.

South Africa's rand slumped to an all-time low on Friday following the finance minister's sacking, prompting speculation the Reserve Bank may call an emergency meeting to increase interest rates for the second time in two months.

The Fed remains the week's star attraction, however, even if after 2-1/2 years of speculation about policy tightening and several false starts, most recently in September, its first, modest hike is unlikely to cause any major ripples.

Ninety percent of economists in a recent Reuters poll predicted the federal funds rate would be raised by quarter of a percent point on Dec. 16, taking it to 0.25-0.5 percent.

The same poll saw a very gradual pace of subsequent increases, with the rate rising to between 1 and 1.25 percent by the end of next year and to 2.25 percent by end-2017.